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Nikola Founder Trevor Milton Indicted On Fraud Charges

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Person holding mobile phone with web page of US electric vehicle company Nikola Corp | Nikola Founder Trevor Milton Indicted On Fraud Charges | featured

On Thursday, a federal grand jury charged Nikola founder Trevor Milton with three counts of criminal fraud for lying. The jury charged Milton with lying about “nearly all aspects of the business” to raise stock sales of Nikola. 

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Trevor Milton Facing Numerous Charges

The US Attorney’s Office in Manhattan accused Trevor Milton, the billionaire Nikola founder, of two counts of securities fraud. The charges include accusations of making false statements about the company and wire fraud. Nikola already asked the 39-year old Milton to resign as chairman in September last year. 

In addition, the Securities and Exchange Commission also filed civil securities fraud charges against Trevor Milton on Thursday. The SEC also requested the US District Court of the Southern District of New York for added sanctions.

They asked to permanently bar him from working as an officer of a company that issues securities. He will also need to surrender all his fraud-related gains and pay a fine.

‘A Straightforward Case’

US Attorney Audrey Strauss told reporters Thursday that Trevor Milton’s case is simple. “This is a very straightforward case, Milton told lies to generate popular demand for Nikola stock.

Beginning at least in or about March 2020, when Nikola announced that its stock would become publicly listed, Milton became increasingly preoccupied with keeping Nikola’s stock price high,” she said during a press briefing.

However, Trevor Milton maintained his innocence. His legal team said that the Nikola founder was “wrongfully accused following a faulty and incompetent investigation”.

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The team, through lawyer Brad Bondi, said that until Milton gets exonerated, justice will remain elusive. Milton pleaded “Not guilty” to the criminal charges Thursday afternoon. He posted a $100 million bond secured against his two properties in Utah. During his bail, he cannot contact investors.   

Trevor Milton Inflated Nikola Stock Through Fraud

Prosecutors said Trevor Milton designed an intricate scheme to inflate company stock by lying about the progress of Nikola vehicles and technology. They said that Milton used Nikola’s deal to go public via a special purpose acquisition company to sell stock to amateur retail investors. Some of these investors who bought Nikola stock lost hundreds of thousands of dollars as the stock tanked following fraud allegations. 

The indictment said that “Milton’s scheme targeted individual, non-professional investors — so-called retail investors — by making false and misleading statements directly to the investing public through social media, and television, print and podcast interviews.” 

Consequently, the grand jury said Milton should forfeit all property “traceable to the commission of said offenses,” which would likely include the more than $1 billion he earned when Nikola went public in June 2020. As a result, Nikola’s stock dropped further down 15.2% to $12.03 a share.

The previous all-time high for Nikola stock was $93.99 on June 9, 2020. As the company’s largest shareholder, Milton held $8.5 billion in Nikola stock at one point. During the summer, Nikola’s market cap even surpassed that of Ford Motor at $31 billion.

Watch the CNBC Television reporting that Nikola founder Trevor Milton charged with making false statements:

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